In the immortal words of Liam Brady: Are you an Avon Lady?
Re: Reserve Team/U18 Team
Well you could try to loan out the the players so they will still be playing football. Newcastle (I believe) scrapped their reserves when Keegan was in charge and I read somewhere that Harry Redknap has got rid of the reserves this season.
If you do get rid of them just make sure to loan them out so the half decent ones actually get some football and progress.
It means that you won't be entered into the Youth or Reserves leagues, however you can still field a Youth or Reserve team, even arrange friendlies for them. Depending on my roster, I'm tempted to play my youths on my reserves team (scrapping the youth team). Or just concentrate on youth development up to age 21, not fielding a reserves team of over 21 players destined for nothing. Curious about peoples' experiences who have done this...
I think it's worth keeping them so the few promising youngsters (your 5%) can play in a U18s team.
Also, you are unlikely to be able to sell the useless players so your only option would be to pay a lump sum to release them from their contract. It makes more sense just to keep them until their contract expires.
yes you can watch your reserves, or control them.
If you opted to be in a reserve/U19 league and you'll emptied out your squad, or have too few, the AI will fill the spaces up with greys. It doesn't matte rif they lose all their games since the board or 1st team squad don't care. I start off with full reserve/U19 squads but they get loaned out and depleted, or the U19's grow up and have to move to the reserves. I'll end up with 2 or 3 U19s. It's no problem.